According to the Association of Serviced Apartment Providers' (ASAP) full year occupancy figures for 2013, London operators achieved an average occupancy of 84 per cent with the average net weekly rental rate up 5 per cent on the previous year to £1157.
Those outside London had an average net weekly rental rate of £620, a 1 per cent increase on 2012 with October proving to be the best month for operators inside and outside the capital.
The sector, which, according to a report by Jones Lang LaSalle, has the potential to grow further and could provide a greater level of profitability for investors than hotels, will continue to thrive, predicts ASAP managing director James Foice, who says operators are already reporting a positive start to business in 2014.
"It’s fantastic to see such an excellent performance for our sector both in London and the rest of the UK in 2013," he said. "At our quarterly meeting yesterday members reported anecdotally that 2014 has started very positively and overall operators are very optimistic that 2014 should be an excellent year. Expansion continues with many members opening new developments in the first half of the year."
Operators with expansion plans this year include Cheval Three Quays with a 159-apartment block opening at the Tower of London in March, StayCity Greenwich, which will open two new purpose-built blocks in Greenwich in May and the London-based Think Apartments, which is planning to double the number of units it offers by 2017 by expanding into locations outside the capital.
David Curtis-Brignell, communications and brand lead at Think Apartments, said the company, which operates seven sites in London, achieved higher occupancy than the average and was predicting further growth this year.
"We believe that this is due to the increased adoption of the aparthotel and serviced apartment offer by both business and leisure customers," he said. "The increase in new developments is also exciting and shows the confidence in operators to be bringing more properties to the market. As we mentioned before, Think has ambitious growth plans and we are hoping to make our own announcements regarding our pipeline before too long."